A lesson about markets: “I will buy your monkeys”

This is probably an ancient story, now widely circulating around the Internet. It’s a powerful tale, very appropriate for today.

From Wikimedia Commons.

The earliest reference I find to this story is an anecdote told by Prasanna S, posted at Eternal sunshine of the rambling mind, 26 May 2006 . Does anyone know its origin, or have an earlier reference? Here is one version:

Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for $10. The villagers knew that the jungle held countless monkeys, easily caught. The man bought 2 thousand.

As the supply diminished, they become difficult to catch, and villagers returned to their farms. The man announced that he would pay $20. The villagers renewed their efforts and caught 1,000 more monkeys.

The supply quickly diminished, but before they returned to their farms the man increased his offer to $40 each. Monkeys became so rare that it was difficult to even see a monkey let alone catch it. But they caught 500.

The man now announced that he would buy monkeys at $100! However, since he had to go to the city on some business his assistant would now buy for the man. The man departed.

Then the assistant told the villagers, “Look at all these monkeys the man has in that big cage. I will sell them to you at $50 each. When the man comes back you can sell the monkey’s back to him for $100.” The villagers queued up with all their saving to buy the monkeys. The assistant took their money. They never saw either the man or his assistant again.

They now owned 3,500 monkeys. They were paid $60,000 to catch them, and bought them back for $175,000.

Such stories serve a valuable function in the aftermath of poor decision-making by a society, shifting blame to a designated enemy. Jews, Blacks, Immigrants, scientists, rebels, Wall Street. People are inventive and can always find a scapegoat for their mistakes.

Unfortunately self-government means taking responsibility for ones actions. A people for whom “its not my fault” is their mantra are natural serfs. Eventually people will come along to help, taking from them the irksome burden of self-government.

8 thoughts on “A lesson about markets: “I will buy your monkeys””

Can you clarify FM which is bad here? Shifting blame and scapegoating, or saying ‘it’s my fault?’ Or are they both somehow bad? Or did you mean to type “it’s not my fault?” {FM: Yes!} Inquiring minds want to know. I have encountered one similar story:

A man comes to town on a horse, to sell some sheep. He encounters a con-man, who convinces him that he represents a rich man who will pay double the standard price if he only herds the sheep into a nearby building. He does so, and the con-man goes in ‘to get your money.’ He never returns, and the building turns out to be a facade, and the sheep are gone.

He rides away, lamenting his loss, and encounters the same con-man in different clothes. The con-man claims to have found the sheep, and takes the man to another building where the sheep supposedly are. The man goes in to get his sheep, and when he comes out (of course they are not there) the con-man has ridden away on his horse.

At this point, in tears, he decides to walk back home, and on the way, he encounters what appears to be a professor on a bridge, gazing over the side in tears. The ‘professor’ tells the man that he has dropped a bag of gold for building a new college into the river by accident, and cannot swim. The man offers to go in and retrieve the gold in return for half of it, and the professor, really the con-man, agrees. The man strips and dives into the river, retrieves the bag, which contains only common rocks, and returns to the bridge to find that his clothes are gone. At this point he is supposedly still cowering in fear that someone will make off with his skin.

“Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for $10.”

Fun story, but it misses out a key player in any such traditional ‘village’, the headman without whose mandate the monkeys would not have been caught en masse in the first place nor the deal negotiated.

Groups do not act in such a concerted fashion without leadership. It’s a societal law of human nature. So perhaps the unacknowledged lesson of the story is that we get the leadership we deserve, i.e. that the headman was ultimately the guilty party.

But I think there is also another dynamic going on, namely that corrupt or inept leadership – ultimately the same thing – takes time to a) be perceived as such and then b) replaced.

This leads us back to the ‘cohesion’ issue in other threads: once the established leadership principle of a collective comes into question, the collective fractures for a while between those who are still loyal to the status quo and those who question it. Until there is resolution which in the context of this story means that they find a way to get their money back from the swindlers or start over with a new headman.
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.Fabius Maximus replies: Perhaps, but that degree of leadership is rare in my experience. More common, in the US at least, is reactive leadership — moving in synch with the crowd. That is the essence of modern celebrity: playing out on the big stage the masses dreams and fears. Our leaders have increasingly become celebrities.

That kind of leadership operates on a different level than the exercise of political and economic power, which is far less visible — and usually (not always) more effective.

this is kind of a niggling point, but if we get the leadership we deserve, who’s guilty, the headman or the people who elected him?
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.Fabius Maximus replies: It is the great question. Everyone must come to their own decision on such things. I believe that in a democracy we collectively assume responsibility for America. Blaming our leaders is the first and largest step to serfdom.

One more point about the parable about the monkeys — It is hard not to think of the politicians in Washington, DC, who have a nice little scheme going, the nearest thing to a political-economic perpetual motion machine, really. Having obtained power, how to keep it – the age-old dilemma of the professional pol in Washington, DC, otherwise known as Soddom on the Potomac.

The answer is to declare a perpetual state of crisis, and then use it as a pretext to take action. If the ‘action’ (passing a spending bill, create a new agency, etc.)- whatever it is – is successful, then you run your re-election campaign on your success, flags waving, bands playing, confetti streaming. But what if your actions have not resulted in the sought-after improvement, or have actually made things worse? Not to worry, because the solution for the crisis is – presto! – more government legislative action. It is a spending perpetual motion machine, and not coinidently a re-election machine, too. It plays well to the psychology of the average voter, too, because many people want to see activity when they look at their government, that they are above all busy “attending to the affairs of the people.” In reality, sometimes doing nothing is the best course of action, “standing pat” in bridge terms, but it is politically very tough to appear inactive, without incurring the wrath of the voters, media, etc. It is better to appear proactive (or even reactive), even if the actions taken are ineffective or even damaging, than to simply do nothing. And of course, if voters see that some problems do not require political intervention, they might begin to question the need for many elected officials in the first place.

This is all standard political science 101 stuff, in the lexicon of experienced pols of both parties, but the people continue to buy it, so the scam continues to be used.
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.Fabius Maximus repllies: Yes, one of the great oldies — Great trouble, from which only I can save you! To quote the words of a master:

Well, either you’re closing your eyes to a situation you do now wish to acknowledge
Or you are not aware of the caliber of disaster indicated by the presence of a pool table in your community.
Ya got trouble, my friend, right here, I say, trouble right here in River City.

… Well, if so my friends, Ya got trouble, Right here in River city!
With a capital “T”, And that rhymes with “P”, And that stands for Pool.
We’ve surely got trouble! Right here in River City!
Remember the Maine, Plymouth Rock and the Golden Rule!
Oh, we’ve got trouble. We’re in terrible, terrible trouble.
That game with the fifteen numbered balls is a devil’s tool!
Oh yes we got trouble, trouble, trouble!
With a “T”! Gotta rhyme it with “P”! And that stands for Pool!

Similar to our situation. Except for us, it’s the banks that ended up owning all the monkeys. To fix the problem the villagers will take out a giant loan to buy them back. We call this ‘recapitalization.’